Amicus Curiae Brief — Moose Jooce, et al., Petitioners v. Food and Drug Administration, et al.

Supreme Court briefApr 1, 2021

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No. 20-1203

IN THE

Supreme Court of the United States

________________

MOOSE JOOCE, ET AL.,

Petitioners,

FOOD & DRUG ADMINISTRATION, ET AL.,

Respondents.

________________

On Petition for Writ of Certiorari to

the United States Court of Appeals for the D.C. Circuit

_________________________________________________

BRIEF OF THE CATO INSTITUTE AND

REASON FOUNDATION AS AMICI CURIAE

IN SUPPORT OF PETITIONERS

_________________________________________________

Manuel Klausner

LAW OFFICES OF MANUEL S.

KLAUSNER

Wells Fargo Center

333 S. Grand Ave., Ste. 4200

Los Angeles, CA 90071

(213) 617-0414

mklausner@klausnerlaw.us

April 1, 2021

Ilya Shapiro

Counsel of Record

Spencer Davenport

CATO INSTITUTE

1000 Mass. Ave., NW

Washington, DC 20001

(202) 842-0200

ishapiro@cato.org

QUESTION PRESENTED

The question presented in the petition, which

references the relevant precedent and describes the

circuit split, can be more simply restated as:

Does a perfunctory ratification cure a rulemaking

promulgated by an improper government official?

TABLE OF CONTENTS

QUESTION PRESENTED ........................................ i

TABLE OF AUTHORITIES .................................... iii

INTEREST OF AMICI CURIAE .............................. 1

INTRODUCTION AND SUMMARY OF

ARGUMENT ....................................................... 1

ARGUMENT ............................................................. 5

THE RATIFICATION DEFENSE

CONFLICTS WITH THIS COURT’S

HOLDING IN LUCIA ........................................ 5

II. RESOLVING THIS IMPORTANT

QUESTION WILL NOT BURDEN THE

GOVERNMENT ................................................. 9

CONCLUSION ........................................................ 11

iii

TABLE OF AUTHORITIES

Cases

Page(s)

Advanced Disposal Servs. East, Inc. v. NLRB,

820 F.3d 592 (3d Cir. 2016) ................................ 3, 7

Alfa Int’l Seafood v. Ross, No. 17-31, 2017 U.S.

Dist. Lexis 96329 (D.D.C. June 22, 2017) ............. 2

Associated Mortg. Bankers, Inc. v. Carson,

2019 U.S. Dist. Lexis 1603 (D.D.C. Jan. 4, 2019) . 6

Cirko ex rel. Cirko v. Comm’r of Soc. Sec.,

948 F.3d 148 (3d Cir. 2020) ................................ 6, 9

CFPB v. Gordon, 819 F.3d 1179 (9th Cir. 2016) ....... 3

CFPB v. Seila Law LLC,

984 F.3d 715 (9th Cir. 2020) .................................. 7

FEC v. Legi-Tech, 75 F.3d 704 (D.C. Cir. 1996) ........ 3

Guedes v. BATFE, 920 F.3d 1 (D.C. Cir. 2019) ......... 8

Heckler v. Chaney, 470 U.S. 821 (1985) .................... 7

In re Harry C. Calcutt III, Decision and Order to

Remove and Prohibit from Further Participation

and Assessment of Civil Money Penalties,

FDIC-12-568e (Dec. 15, 2020) .............................. 10

Intercollegiate Broad. Sys. v. Copyright Royalty

Bd. & Librarian of Cong.,

796 F.3d 111 (D.C. Cir. 2015) ............................ 3, 8

Jones Bros., Inc. v. Sec’y of Labor,

898 F.3d 669 (6th Cir. 2018) .............................. 2, 6

Lucia v. SEC, 138 S. Ct. 2044 (2018) ............ 2, 3, 6, 8

Moose Jooce v. FDA, No. 18-203, 2020 U.S. Dist.

Lexis 23322 (D.D.C. Feb. 11, 2020) ......... 5, 6, 7, 10

Page(s)

Morris & Dickson, Co. v. Whitaker,

360 F. Supp. 3d 434 (W.D. La. 2018) ..................... 6

Ramsey v. Comm’r of Soc. Sec.,

973 F.3d 537 (6th Cir. 2020) .................................. 6

Ryder v. United States, 515 U.S. 177 (1995) ............. 8

SW Gen. Inc. v. NLRB, 796 F.3d 67

(D.C. Cir. 2015) ....................................................... 2

Wilkes-Barre Hosp. Co., LLC v. NLRB,

857 F.3d 364 (D.C. Cir. 2017) ................................ 7

Statutes

5 U.S.C. § 553 ......................................................... 4, 5

5 U.S.C. § 554 ............................................................. 5

5 U.S.C. § 556 ............................................................. 5

5 U.S.C. § 557 ............................................................. 5

5 U.S.C. § 706 ............................................................. 4

Regulations

85 Fed. Reg. 14,565 (Mar. 13, 2020) .......................... 8

85 Fed. Reg. 7215 (Feb. 7, 2020)................................ 8

Other Authorities

Angela C. Erickson & Thomas Berry, Pacific Legal

Found., But Who Rules the Rulemakers? A Study

of Illegally Issued Regulations at HHS (2019) ...... 2

Kent Barnett, The Consumer Financial Protection

Bureau’s Appointment with Trouble,

60 Am. U. L. Rev. 1459 (2011) ............................... 9

INTEREST OF AMICI CURIAE 1

The Cato Institute was established in 1977 as a

nonpartisan public policy foundation dedicated to

advancing the principles of individual liberty, free

markets, and limited government. Cato’s Robert A.

Levy Center for Constitutional Studies was

established to restore the principles of limited

constitutional government that are the foundation of

liberty. Toward those ends, Cato publishes books and

studies, conducts conferences and forums, and

produces the annual Cato Supreme Court Review.

Reason Foundation is a nonpartisan and nonprofit

organization, founded in 1978 to promote liberty by

developing, applying, and communicating libertarian

principles and policies. Reason advances its mission

by publishing Reason magazine, as well as website

commentary, and by issuing research reports. Reason

also communicates through books, articles, and

appearances at conferences and on broadcast media.

Amici have a strong interest in enforcing our

constitutional separation of powers and ensuring the

democratic accountability of executive officers—both

issues that this case squarely presents.

INTRODUCTION AND

SUMMARY OF ARGUMENT

Lower courts have lately been hearing a variety of

challenges to agency action based on alleged defects

in authority. Some of these cases reflect the

1 Rule 37 statement: All parties were timely notified and

consented to the filing of this brief. No part of this brief was

authored by any party’s counsel, and no person or entity other

than amici funded its preparation or submission.

consequences of recent decisions by this Court. See,

e.g., Jones Bros., Inc. v. Sec’y of Labor, 898 F.3d 669,

679 (6th Cir. 2018) (addressing a defect in

constitutional authority to an agency adjudication in

the wake of Lucia v. SEC, 138 S. Ct. 2044 (2018)).

Others involve claims that an administration has

abused its authority to name “acting” directors

without undertaking constitutional procedures for

appointments. See, e.g., SW Gen. Inc. v. NLRB, 796

F.3d 67, 72–78 (D.C. Cir. 2015) (finding that the

agency’s acting general counsel violated the Federal

Vacancies Reform Act). Finally, there are

controversies like this one, which involve a small

number of agencies with an entrenched practice of

having career civil servants sign off on law-like rules,

in violation of the Constitution’s requirement that

principal officers bear responsibility for such policies.

See Angela C. Erickson & Thomas Berry, Pacific

Legal Foundation, But Who Rules the Rulemakers? A

Study of Illegally Issued Regulations at HHS 3 (2019)

(finding that 98% of the FDA’s final rules were issued

by career employees who did not have the

constitutional authority to do so); see also Alfa Int’l

Seafood v. Ross, No. 17-31, 2017 U.S. Dist. Lexis

96329 (D.D.C. June 22, 2017) (involving an

Appointments Clause challenge to a fishing

regulation promulgated by career civil servant).

These disputes all implicate the same important

federal question: how do courts retroactively redress

unauthorized agency action? The answer in practice

depends on the administrative process at issue.

When these challenges are brought against agency

adjudications, this Court has provided clear

instructions. In Lucia, the Court held that “the

appropriate remedy for an adjudication tainted with

an appointments violation is a new hearing before a

properly appointed official.” 138 S. Ct. at 2055. The

new judge, moreover, could not be the same as the one

who presided over the original enforcement action. Id.

Yet administrative adjudications represent only a

small subset of all regulatory activity. For the rest,

courts are turning to the ratification doctrine, a onesize-fits-all affirmative defense that allows agencies

to cure its unauthorized action with little more than

a signature. The doctrine, which originated the D.C.

Circuit, requires courts to uphold good-faith

affirmations by properly appointed officers of prior

decisions by unauthorized officials. See Intercollegiate

Broad. Sys. v. Copyright Royalty Bd. & Librarian of

Cong., 796 F.3d 111, 117–21 (D.C. Cir. 2015); FEC v.

Legi-Tech, 75 F.3d 704, 708–09 (D.C. Cir. 1996).

Because agencies are presumed to make detached and

considered judgments, an agency’s ratification retains

its curative powers even if, on its face, it appears to be

a “nothing more than a rubberstamp.” Id. at 708. At

least two other circuits have adopted the D.C.

Circuit’s ratification doctrine to cure agency actions

that suffer defects in constitutional authority. See

CFPB v. Gordon, 819 F.3d 1179, 1190–92 (9th Cir.

2016); Advanced Disposal Servs. East, Inc. v. NLRB,

820 F.3d 592, 602–06 (3d Cir. 2016).

The problem is that the ratification doctrine paints

with too broad a brush. Courts are failing to

differentiate administrative action that’s suitable for

ratification from action that’s not. Exercises of

prosecutorial discretion are ratified just as easily as

legislative rules. Yet unlike prosecutorial discretion,

legislative rules—like the FDA’s vaping regulation

here—are beholden to procedural requirements that

ensure

public

participation

and

reasoned

policymaking. See 5 U.S.C. §§ 553, 706 (establishing

notice-and-comment rulemaking procedures and

reasonableness review of agency action).

By treating all agency actions the same,

ratification runs afoul of this Court’s guidance in

Lucia that a “new hearing” was the proper remedy for

an adjudication tainted by an Appointments Clause

violation. 138 S. Ct. at 2055 Of course, the Lucia

petitioner had a right to an administrative hearing as

an initial matter. The obvious implication is that the

aggrieved party is due a semblance of the procedural

rights to which he or she originally had been entitled.

Under Lucia, agencies may employ ratification to

cure constitutional defects to agency action—but only

to action that is unburdened by rigorous procedural

requirements, such as an exercise of prosecutorial

discretion or the issuance of a nonbinding guidance

memorandum. But Lucia does not permit agencies to

retroactively rubberstamp agency action that flows

from processes that convey the force and effect of law,

including agency adjudications and legislative rules.

For adjudications, Lucia calls for a “new hearing.” For

legislative rules like the one at issue here, Lucia calls

for the agency to hear out the aggrieved parties, by

supplementing the record with their comments.

Courts have turned to the ratification doctrine in

part out of fear for the administrative fallout that

would ensue if they disrupted rules that are already

on the books. Such concerns are unwarranted.

Agencies often reopen their records in response to

adverse court decisions. Any equitable remedy could

be tailored to aggrieved parties who had participated

in the original rulemaking. There is no reason to

believe that an adverse decision for the government

here would lead to greater administrative burden.

In sum, the Court should grant the petition

because the decision below conflicts with Lucia on the

important federal question of how to remedy a

constitutional defect in authority.

ARGUMENT

I. THE

RATIFICATION

CONFLICTS

WITH

THIS

HOLDING IN LUCIA

DEFENSE

COURT’S

The district court below held there was “no

reason—other than the existence of APA

procedures—for differentiating between ratifications

of rules and ratifications of enforcement decisions or

agency adjudications.” Moose Jooce v. FDA, No. 18203, 2020 U.S. Dist. Lexis 23322, at *15 (D.D.C. Feb.

11, 2020). But this understanding, affirmed by the

D.C. Circuit, conflicts with this Court’s reasoning in

Lucia, which makes clear that “the existence of APA

procedures” affects the viability of ratification.

To appreciate Lucia’s effect on the instant case,

bear in mind that the Administrative Procedure Act

creates rigorous procedures for two types of agency

action: trial-like adjudications and legislative rules.

Compare 5 U.S.C. § 553 (establishing procedures for

notice-and-comment rulemakings) with 5 U.S.C. §§

554, 556, 557 (establishing procedures for formal

adjudications). Only a small minority of agency action

falls into these two categories; most agency policy is

implemented through informal means that are

subject to minimal APA requirements.

Lucia addressed a constitutional defect in a

formal adjudication. As a remedy, the Court required

the agency to undertake a “new hearing” with a

properly appointed administrative law judge, one who

had not heard the matter when it first came through

the agency. Lucia, 138 S. Ct. at 2055. Plainly, the

Lucia Court was influenced by the “the existence of

APA procedures.” In requiring a “new hearing,” the

Court modeled its equitable remedy on the

petitioner’s existing procedural rights under the APA.

Following Lucia, lower courts have routinely given

new hearings in front of different administrative law

judge for constitutionally defective administrative

adjudications. See, e.g., Jones Bros., 898 F.3d 669;

Associated Mortg. Bankers, Inc. v. Carson, 2019 U.S.

Dist. Lexis 1603 (D.D.C. Jan. 4, 2019); Cirko ex rel.

Cirko v. Comm’r of Soc. Sec., 948 F.3d 148 (3d Cir.

2020); Ramsey v. Comm’r of Soc. Sec., 973 F.3d 537

(6th Cir. 2020); Morris & Dickson, Co. v. Whitaker,

360 F. Supp. 3d 434 (W.D. La. 2018).

Lucia, therefore, instructs lower courts to tailor

remedies such that they account for the differences

among administrative processes. The ratification

doctrine, by contrast, “reject[s] the notion that the

type of agency proceeding mattered.” Moose Jooce,

2020 U.S. Lexis 23322, at *15. Put differently, it

makes no sense for the Court to require a “new

hearing” for adjudications tainted by a defect in

authority, but then for lower courts to deny any

meaningful process in “curing” defects to legislative

rulemaking—the only other type of agency action

subject to robust APA safeguards.

To be sure, the ratification doctrine is appropriate

in many cases. Where, for example, a defect in

authority affects an exercise of prosecutorial

discretion, a rubberstamp ratification presents little

concern, because these kinds of agency actions are

neither bound by procedural safeguards nor even

subject to judicial review. See Heckler v. Chaney, 470

U.S. 821, 832 (1985) (establishing a presumption

against judicial review of an agency’s discretion in the

enforcement of its regulations). Simply put, if the

original action required little more than a signature

to effectuate, then the ratification requires no more,

either. Lower courts often employ ratification in this

unobjectionable context. CFPB v. Seila Law LLC, 984

F.3d 715, 718 (9th Cir. 2020) (remedying a defective

civil investigative demand), vacated and remanded,

140 S. Ct. 2183 (2020); Wilkes-Barre Hosp. Co., LLC

v. NLRB, 857 F.3d 364, 370–72 (D.C. Cir. 2017)

(curing a defective enforcement notice); Advanced

Disposal Servs. East, Inc, 820 F.3d at 602–06

(redressing a defective enforcement notice).

A barebones ratification will thus comport with

Lucia for most agency action, because most agency

action is informal and escapes rigorous procedural

guarantees under the APA. For a minority of agency

actions, however—trial-like adjudications and

legislative rules—Lucia demands that lower courts

heed “the existence of APA procedures” in remedying

an Appointments Clause violation. Moose Jooce, 2020

U.S. Lexis 23322, at *15.

There is a second way in which the D.C. Circuit’s

ratification defense conflicts with Lucia’s remedial

reasoning. Lucia explained that this Court’s

Appointments Clause remedies are designed not only

to advance the Constitution’s “structural purposes,”

but also “to create incentive[s] to raise Appointments

Clause challenges.” Lucia, 138 S. Ct. at 2055 n.5

(quoting Ryder v. United States, 515 U.S. 177, 183

(1995)). Ratification achieves the opposite—rather

than “incentivize,” it nullifies Appointments Clause

challenges. Because the defense “cures” any potential

authority defect, ratification resolves the underlying

claim on the merits, “regardless of whether the

previous officer was or was not validly appointed.”

Guedes v. BATFE, 920 F.3d 1, 13 (D.C. Cir. 2019)

(cleaned up); see also Intercollegiate Broad., 796 F.3d

at 119 n.3 (ratification defeats Appointments Clause

challenge). The upshot is that ratification undermines

the prophylactic purpose of Appointments Clause

jurisprudence, as this Court set forth in Lucia.

The perverse result is the continued violation of a

key structural component to the separation of powers.

Since the petitioners filed against the FDA, the FDA

has continued to flout the constitutional restraints of

the Appointments Clause. FDA employees continue to

issue rules today. See, e.g., 85 Fed. Reg. 14,565 (Mar.

13, 2020); 85 Fed. Reg. 7215 (Feb. 7, 2020). And

because the FDA knows it can always ratify

improperly promulgated rules, it has little motivation

to establish proper appointments in the first instance

because it can amend them any time scot free. See

Kent Barnett, The Consumer Financial Protection

Bureau’s Appointment with Trouble, 60 Am. U. L.

Rev. 1459, 1484 (2011).

II. RESOLVING

THIS

IMPORTANT

QUESTION WILL NOT BURDEN THE

GOVERNMENT

At least in part, lower courts have permitted

rubberstamp ratifications out of concern for the

potential repercussions of disrupting rules that are

already on the books. See, e.g., Alfa Int’l Seafood, 2017

U.S. Dist. Lexis 96329, at *9 (justifying ratification

because “the disruptive effect of vacatur would be

substantial”). Such fears do not withstand scrutiny.

As an initial matter, agencies have a history of

overstating the administrative burden of correcting

administrative action that suffers from a defect in

constitutional authority. After Lucia, for example, the

Social Security Administration warned the Third

Circuit that “an adverse ruling would open the

floodgates” to thousands of cases brought by “every

disappointed claimant [seeking] a do-over before a

new ALJ simply by raising a Lucia claim in district

court.” Cirko, 948 F.3d at 159. On investigating this

claim, the court there concluded that “the purported

flood is actually a trickle.” Id.

More importantly, any remedy would be rooted in

the judiciary’s equity power, so this Court could

employ prudential doctrines that mitigate any undue

administrative consequences. Lucia is illustrative. In

crafting an equitable remedy there, the Court neither

invoked the APA’s procedural requirements nor

demanded that the agency start a new proceeding

from scratch. In implementing Lucia’s flexible

mandate for a “new hearing,” agencies typically

assign the case to a different administrative law

judge, who then takes limited briefing based on the

existing record. See, e.g., In re Harry C. Calcutt III,

Decision and Order to Remove and Prohibit from

Further Participation and Assessment of Civil Money

Penalties, FDIC-12-568e, 4–5 (Dec. 15, 2020)

(Decision and Order to Remove and Prohibit from

Further Participation and Assessment of Civil Money

Penalties) (explaining the agency’s post-Lucia

procedure). Lucia basically requires the agency to

again hear out the aggrieved party, nothing more.

It’s easy to imagine how Lucia’s remedial

prescriptions would translate to this case, and that

the resultant administrative burden would be

minimal. For example, relief could be limited to

parties who participated in the notice-and-comment

process for the original rule. At least one of the

plaintiffs submitted a comment to the FDA, arguing

that the proposed rule did not consider the positive

benefits of vaping. Moose Jooce, 2020 U.S. Lexis

23322, at *5. This comment focused on the same

issue—evidence regarding the public health benefits

of vaping—about which the petitioners now seek to

inform the agency as a remedy for the agency’s

(ongoing) violation of the Appointments Clause.

Finally, there is nothing remarkable about a

regulatory agency supplementing the record for a

legislative

rule.

Agencies

routinely

reopen

administrative records on remand without vacatur

from federal courts.

In sum, lower courts have turned to the

ratification doctrine at least partly out of undue

concern for administrative disruption. These concerns

are unfounded because any equitable remedy would

be limited to supplementing the record with

comments from aggrieved parties who preserved their

claims by participating in the original rulemaking.

CONCLUSION

One-sentence

ratifications

cannot

cure

Appointments Clause defects in agency rulemaking.

Permitting them incentivizes agencies to flout the

rulemaking process, while disincentivizing litigants

challenging the agency action. This Court should

grant the petition and ultimately reverse the court

below.

Respectfully submitted,